Chinese shares decline

Chinese share prices closed 1.36 percent lower Friday on concerns over record high oil prices and profit-taking in petrochemicals and banks, dealers said. They said the profit taking was well contained and was to be expected given the market's advance since the revaluation of the yuan on July 21.
The Shanghai A-share Index fell 16.88 points to 1,227.12 on turnover of 17.79 billion yuan (2.19 billion US dollars) while the Shenzhen A-share Index fell 5.62 points or 1.94 percent to 283.46 on turnover of 11.48 billion yuan.
The benchmark Shanghai Composite Index, which covers A and B-shares, fell 15.66 points or 1.32 percent to 1,167.92 on turnover of 18.05 billion yuan.
The yuan closed at 8.0980 to the US dollar, another fresh high since the yuan revaluation last month.
"The market came under pressure from profit-taking in the afternoon with blue chips such as Sinopec and Unicom losing ground, and the record high crude price also raised some concerns," said Liu Jingde, an analyst at Beijing Securities.
Crude prices rose 1.39 percent to a new high of 65.80 US dollars a barrel on the New York Mercantile Exchange after earlier breaching 66 dollars a barrel.
"But the consolidation is only a temporary thing, and the market is expected to go up in the long term on the back of improved sentiment and inflows of fresh money," the analyst added.
Sinopec lost 0.12 yuan or 2.60 percent to 4.49. China Unicom fell 0.10 or 3.39 percent to 2.85.
Other oil refiners were also hit as China Petrochemical Qilu fell 0.18 yuan or 2.48 percent to 7.09.
Sinopec Yangzi Petrochemical slipped 0.26 yuan or 2.45 percent to 10.34. Jinzhou Petrochemical slid 0.09 or 2.86 percent to 3.06.
Banking counters saw some profit taking as well after recent strong gains. China Merchants Bank, the largest listed lender, shed 0.21 yuan or 2.96 percent to 6.88. Shanghai Pudong Development Bank, in which Citigroup has a 4.62 percent stake, fell 0.25 or 2.85 percent to 8.51. China Minsheng Banking Corp, in which International Finance Corp holds a 1.08 percent stake, was down 0.19 yuan or 3.32 percent at 5.53. Shanghai-based firms were in favour with investors expecting them to offer state share sale plans in the near future, dealers said. The Shanghai government recently said it plans to complete the sale of state shares of local companies within a year.
"State share sales have become more and more popular with investors because the compensation offers will eventually lower the companies' price to earnings ratios and increase their attractiveness," a Shanghai-based analyst said.
Shanggong Co Ltd and Shanghai Forever Co Ltd both rose by their daily limits of 10 percent to 5.23 and 7.14 yuan. Shanghai Lansheng and Shanghai Tyre and Rubber also jumped by their daily limits of 10 percent to 4.05 and 6.57 yuan. The Shanghai B-share Index rose 1.24 points or 1.88 percent to 67.43 on turnover of 31.17 million US dollars and the Shenzhen B-share Index was down 0.36 point or 0.15 percent at 238.89 on turnover of 306.87 million Hong Kong dollars (39.44 million US dollars).